Empty

LAS VEGAS -- Digital-cinema stakeholders said that while digital-cinema and 3-D has been widely embraced, there remain myriad unresolved technical and business issues that threaten the momentum.

Sunday at the NAB Show's Digital Cinema Summit, MKPE Consulting's Michael Karagosian warned that not one of the virtual print fee agreements that are moving the industry forward have all six major studios on board.

In the new deals, studios pay a fee starting at $800 per screen, per movie, as part of a financing model to enable the conversion to digital cinema. Karagosian said that if one studio doesn't play, that means that the exhibitor contribution will grow.

As an example, he suggested that if one major studio held back annually on just two blockbuster titles that the exhibitor contributions might grow from 20% to 32% of the total.

He said that if exhibitors buy their own equipment without a VPF deal, there still are distribution challenges in the business agreements. He also expressed concern about the stability of the technology, saying that under current contracts, exhibitors or third parties are at risk if the spec changes.

Theater owners demonstrated a cautious approach, more focused on business than technical challenges. "We have not seen any cost benefits," Marcus Theatres' Mark Collins said. "We need to start promoting digital cinema as something that is different from what (moviegoers) have."

"We're ready to roll out when it make sense," he said. "I want to see a wow factor, I want to see more people coming to the theater. (Audiences) don't care whose server we are using."

The costs for an exhibitor to transition to digital cinema compared with film is 200%-300% higher in a 25-year period, Karagosian estimated. This includes the costs of installation, maintenance and other operational expenses.

Karagosian's presentation also reflected the current interest in 3-D. "I expect to see 3-D be the driver for most of the installation this next year," he added.

He added, however, that the playback system for such content is different from those required for such other functions as 2-D advertising and games. "We're looking to reduce this to one box to handle all of the various preshows," he said.

Meanwhile, studio execs described remaining production challenges.

For one, Disney vp production technology Howard Lukk identified the supply of 3-D camera rigs. He said that if there are one or two major 3-D features in production in Hollywood at the same time, there are enough available camera rigs, "but the minute you put a third in place, there are not enough."

"It's not a fad," he added. "There are CG and live-action (features) coming. It would be good to see a better supply of camera rigs and stereoscopic postproduction tools."

Warner Bros. senior vp technology Wendy Aylsworth addressed the need for a method of handling subtitles in 3-D content. "There have not been many 3-D movies done with subtitles," she said, adding that "most of the films so far have been children's films, so they are dubbed rather than subtitled."

She presented two methods of subtitling that Warners has been investigating.

The NAB Digital Cinema Summit is co-produced by the Society of Motion Picture and Television Engineers and Entertainment Technology Center.